US Cellular 2008 Annual Report Download - page 184

UNITED STATES CELLULAR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 12 ASSET RETIREMENT OBLIGATIONS (Continued)
‘‘Revisions in estimated cash outflows’’) and other changes in asset retirement obligations during 2008
and 2007 were as follows:
(Dollars in thousands) 2008 2007
Balance, beginning of period .......................... $126,844 $127,639
Additional liabilities accrued ......................... 5,310 5,974
Revisions in estimated cash outflows .................. 8,321 (15,331)
Acquisition of assets .............................. 419 348
Disposition of assets .............................. (1,224) (555)
Accretion expense ................................ 9,312 8,769
Balance, end of period .............................. $148,982 $126,844
NOTE 13 NOTES PAYABLE
U.S. Cellular has used short-term debt to finance acquisitions, for general corporate purposes and to
repurchase common shares. Proceeds from the sale of long-term debt from time to time have been used
to reduce such short-term debt. Proceeds from the sale of non-strategic wireless and other investments
from time to time also have been used to reduce short-term debt.
U.S. Cellular has a $700.0 million revolving credit facility available for general corporate purposes. At
December 31, 2008, there were no outstanding borrowings and $0.3 million of outstanding letters of
credit, leaving $699.7 million available for use. Borrowings under the revolving credit facility bear interest
at the London Interbank Offered Rate (‘‘LIBOR’’) plus a contractual spread based on U.S. Cellular’s credit
rating. U.S. Cellular may select borrowing periods of either seven days or one, two, three or six months.
At December 31, 2008, the one-month LIBOR was 0.44% and the contractual spread was 60 basis
points. If U.S. Cellular provides less than two days’ notice of intent to borrow, interest on borrowings is
the prime rate less 50 basis points (the prime rate was 3.25% at December 31, 2008). This credit facility
expires in December 2009. In 2008, U.S. Cellular paid fees at an aggregate annual rate of 0.25% of the
total facility. These fees totaled $1.7 million, $2.8 million, and $2.3 million in 2008, 2007, 2006,
respectively.
Information concerning notes payable under this revolving credit facility is shown in the table below:
Year Ended December 31, 2008 2007
(Dollars in thousands)
Balance at the end of the year .......................... $ — $ —
Weighted average interest rate at the end of the year ......... N/A N/A
Maximum amount outstanding during the year .............. $100,000 $60,000
Average amount outstanding during the year(1) ............. $ 20,833 $20,000
Weighted average interest rate during the year(1) ............ 3.38% 6.03%
(1) The average was computed based on month-end balances.
U.S. Cellular’s interest cost on its revolving credit facility is subject to increase if its current credit rating
from Standard & Poor’s Rating Service and/or Moody’s Investors Service was lowered and is subject to
decrease if the rating was raised. The credit facility would not cease to be available or accelerate solely
as a result of a downgrade in U.S. Cellular’s credit rating. However, a downgrade in U.S. Cellular’s credit
rating could adversely affect its ability to renew the existing credit facility or obtain access to new credit
facilities in the future.
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